Speculation around Honda’s F1 future (Update: Honda to sell team or quit)

Pitpass and GrandPrix.com are questioning the future of Honda’s F1 team and suggesting it could be sold or pulled out of F1.

Is this just speculation during a slow time for Formula 1 or is Honda about to become F1’s first victim of the financial downturn?

Grandprix.com had previously downplayed stories about Honda’s $217m expenditure on F1 last year. It pointed out the reason Honda had spent so much more on F1 than its rival teams was because of its investment in Super Aguri.

Like almost every other car manufacturer on the plant, Honda is suffering the effects of the global financial downturn. Two weeks ago it announced it would close its plant in Swindon for two months next year. Its US sales have fallen by almost a third.

Honda have fallen into a slump since Jenson Button scored the team’s first F1 win at the Hungaroring in 2006. After a disastrous 2007 Nick Fry hired Ross Brawn to turn the team’s fortunes around. Although 2008 has seen little improvement the team is believed to have focussed its efforts on its 2009 car in order to take advantage of next year’s swingeing rules changes. Has that gamble worked against it in the prevailing financial climate?

The loss of another team could reduce the F1 entry to nine teams and 18 cars. That is understood to be below the minimum number of cars F1 is contractually required to bring to each round, raising the possibility of some teams being asked to field three cars.

However it’s impossible to say anything for certain about the Honda’s future or its consequences for F1. I hope the reports are untrue, and I’ll be keeping an eye out for further details. Please post anything else you find below.

Update:Pitpass claims the workforce were told tonight that Honda will not be competing in F1 next year and the team is to be put up for sale.

67 comments on “Speculation around Honda’s F1 future (Update: Honda to sell team or quit)”

Grandprix.com reckon they’re waiting for Japan to wake up in a few hours to hear any announcement. I personally wouldn’t be surprised to hear Honda pull the plug – after all, F1 is a slightly unnecessary expenditure when times are rough. That doesn’t mean I condone willy-nilly entering (play during the good times, but don’t in the bad) but it does mean I understand that Honda may have looked at their expenses and decided that after several years of only little success, maybe it is time. Although I always thought Toyota would be the first.

I guess we’ll have to wait and see what comes of this through the night and into tomorrow.

Problem is that Honda could only be the first.
I always though there was a bit of tension between Honda and Toyota; neither wanting to be the first to throw in the towel.
If Toyota called it a day as well – in a few months time of course – would four teams have to run three cars? And how exactly would Bernie enforce that?

Who could blame Honda if it has decided to pull out? The last two years have been absolutely dire and the whole Super Aguri project can only have been a distraction to the team’s senior management. But Super Aguri was only the latest in a long line of Honda’s mistakes, going back to its days as BAR.

The team has needed real leadership from an experienced F1 person for some time. Now it has Ross Brawn and things should get better. F1 used to be about star designers – Gordon Murray, Adrian Newey, John Barnard, et al – who virtually designed whole F1 cars single handed. Now that F1 teams are so big, it’s much more about having the right people using the right facilities in the right way and bringing it all together seamlessly. McLaren and Ferrari currently do that very very well.

Ross Brawn could be the man to do that for Honda, but it’s an awfully big ask in a relatively short time. Hopefully, Honda’s board will hold off making any decision about the company’s F1 future until the effect of having Brawn becomes clear.

If it can’t wait and pulls out now that’d be a pity – the Japanese company can look back on its previous achievements with a great deal of pride. Leaving F1 at the end of a dismal season will not be the way Honda wants to depart.

Terrible news but certainly it would be good news as bernie’s company is contracted is it not to supply a minimum of 20 cars for the grid?
That would leave it open for the rest of the manufacturers to opt out and set up a new F1 by another name and wit the old circuits in america/canada etc to tell him and the fia to get lost – sorry living in hope there

All i will say is look at the current headlines of the worst possible outcome for the team and you will not be suprised in a few hours time. Not good news for over 600 people in the current employment market.

Red Bull took over Jaguar from Ford, and i would imagine due to the loyal traditions of the Japanese people to their workforces a deal would be brokered where the plant would be given away for a nominal pound fee to anyone who could guarantee finance to keep it open for a 3 – 5 year period.

Whatever happens the axe will fall, anyone stepping up to F1 from another series will take an amount of staff with them and once up to speed redundancies would surely follow for the people that helped teach them the facility, etc

DR has just i think layed off staff with Aston Martin so i doubt it ‘arporter’

Anyone from outside buying it could possibly decide they cannot afford to keep on that many staff and a lot of the most talented staff will already have made arrangements to seek work or be trying to now or be head hunted in the transition period.

All this makes it a pretty uncertain future for a lot of people over a supposedly relaxing part of the year.

If there are a couple of potential buyers in the pipeline, presumably they’d also have shown an interest in STR.

What little interest there has been in STR is by people/groups who want to know what the “customer car” regulations are going to be over the next few seasons. They want to come in and run the team like STR has been – i.e. get a manufacturer to do all the work for you, give you all the bits, and you just do the day-to-day running of their B-team, in effect.

I’m willing to bet there may be a certain amount of interest in Honda for the same reasons, but I’m much less certain there’s anyone who wants to come in and run their own “proper” team.

This sort of thing is only going to add to Mosely’s case for basically spec-series F1.

According to a member of my family who is an engineering supplier to F1, the word is that Toyota will pull out in January 2009 under similar terms to those set out by Honda. I have no idea how accurate this information is.

I guess the financial situation was just the final thing needed to pull the plug. Part of blame could as well be put on all the rumors about the future of F1. Sole engine supplier, the move to Asian venues, no race in North America, the classic tracks in France, the UK, and Germany in doubt… The F1 they joined and saw as a good investment due to prestige and marketing, could very well be gone in 2-3 years time. Why spend a lot of money on a sport when not even the fans really can get a grip on the situation? Better to withdraw, and eventually make a new start later on. But I doubt that any auto manufacturer would want to run a team in a F1 series with standard engines. Then other racing series (like touring car championships) could be more interesting from a marketing perspective. Maybe the new F1 in a few years time is again dominated by small private teams?

Tommy, you clearly do not understand how major companies work, especially those based in other countries. Monetary decisions to pull out are made at Director level of the main group not operational level of the dependent company for things like this.

If Honda suddenly decides to pull out, the other manufactures could do just the same thing.

Dammit, this is a b***h! Just when Honda had the chance to finally become good again – this happens.

Rubens may be able to get a drive at Toro Rosso (which he probably would have done anyway) but Button and Senna are screwed for this year (and Button maybe forever!)

With this expected announment of immediate retirement – Toyota and Renault may follow later on. This may be a big change for F1 – with big spending manufactures leaving and privateers replacing them cos they can afford it.

The cynic in me wonders if Honda is saving face in the possibility of a third straight F1 car that may well be another dud.

They pinned everything on their 2009 car from very early on this season. If the money was an issue (and bear in mind that Honda is based in an Asian market that isn’t said to be suffering as much as its Western counterparts) then why didn’t they find a sponsor instead of pushing the (now ill-fated) green theme?

If this is true it’s an appalling way for Honda to treat the poor people in Brackley in the run up to Christmas.

They should be rethinking the customer cars.
This way one manufacter can provide 2 teams (extra income) and the second team has a ‘cheap’ car.
And rearrange the Money pot even better…
Finally they shall have to!

Honda away would be bad, but if toyota goes aswell, that would be disaster :(

Alex – I wouldn’t say Honda is purely in the Asian market. They are in the world market now and are being affected by N.A. and Europe economic conditions directly. They have plants in these markets which are probably hurting and they have to be accountable to those workers. Not to mention the Asian market is better, but has still be falling over the last few weeks, only not as bad.

muckymuck – I appreciate that the economic crisis is a global one, but equally what is a carbon fibre fabricator thinking while he tells his family that he may only have a few weeks of work left in one of the world’s most cash-rich sports, when Honda have been running a logo free livery for the last two years?

To Haplo: When Ford announced about the sale of Jaguar Racing in 2004, they had been losing money for 3 years or so. How can you compare Ford and Honda? Honda still is a profitable company, while Ford had not been one in 2004.

what is a carbon fibre fabricator thinking while he tells his family that he may only have a few weeks of work left in one of the world’s most cash-rich sports, when Honda have been running a logo free livery for the last two years?

Probably the same thing the poor guy at the Honda Swindon factory thats shutting down for 2 months, or the delayed one in India, is thinking as he fears for his job whilst watching his company plough hundreds of millions of dollars into a non-essential sport.

Alex – That’s true enough…I see your point about Honda being logo free and cutting F1 jobs right before Christmas. I still think money is a factor, but maybe optics is even more important. F1 can come off as a luxury to the manufacturer teams in the eyes of the public who see their core business as manufacturing (Only Ferrari treat it as a core component of their business).

It’s partially Honda’s own fault for being self-reliant and not selling ad space on their livery as well as expanding rapidly this year. Now that it’s crunch time, it all backfired on them.

Dang it…I really wanted to see what their new car could do over the next season…

Tommy, you clearly do not understand how major companies work, especially those based in other countries.

Mav – its not about “Other countries”. Living in what used to be automobile capital of the world, I am close witness to “how major companies in western world work” as well. And to be honest the amount of uncertainity, lack of communication till the boat is just about to capsize is just the same ( refer the crumbling of Big Banks in recent days)

Coming back to Honda Story, apparently Honda Bosses in Japan have finally realised that the British Management under Nick Fry had systematically taken them for ride, by pushing their own agenda ahead and marginalizing the Tokyo backed “Men” in boardroom politics ( One example that comes to mind is Gil-De-Ferran). I think Honda’s announcement is more to this internal Politiking with Nick Fry and his cronies. Not to mention for carte blanche that Tokyo bosses gave him Nick couldn’t deliver anything worth mentioning in last three years other than the chance win in rain affected Hungary’06.

Relation between Nick Fry and Honda bosses must be like of Fund Manager and Investor in Sinking markets, The Investor finally has lost confidence in Fund Manager’s capability to give them returns.

As much as I would feel bad about Leaving of another team. I always felt it was just matter of time that this was to happen. I wonder, why Nick and Brawn made it known to their FOTA counterparts :? Is it another last ditch attempt to get some personal benefits by making FOTA bosses make some choices under Duress :?

Because they can hardly stand toe to toe with the other FOTA members talking about drastic cost-cutting measures and not mention Honda’s withdrawal, it would completely undermine FOTA’s position against Mosely and make all the teams look very silly indeed if Honda wer backing something that was far too late to save them.

This was the piece of news i wasn’t expecting to hear..Honda had focus its development on the next season, was looking for drivers etc..and suddenly oops.
Hasn’t Petrobras move from Williams to Honda for next season? If Toyota goes next i wonder what will happen to F1..
No Honda + Senna for next year :|
I still hope this news turn out to be false or if they happen to be true that a buyer comes forward..but who in this current crysis has the money and/or will to do that :(

“Finding someone to back the team during these tumultuous times is going to prove difficult and there’s already talk that Bernie Ecclestone may step in to attempt to work out a deal to keep Honda around.”

Look at course of events ever since Dave Richards Left and Nick Fry has taken over. This team has been quintessential a british outfit with blank cheque from Japanese Top Management? Nick has been systematically making this team as “Of the, By the, For the” British,

As though there is dearth of Talent in Japan to be brought on board as “Development drivers”. While James Rossiter was pushed across the American Counterparts to Run for AGR racing, was the favor returned by decent test drives to Danica/Marco? Answer is sadly NO. Mr Fry has been Flip-Flopping on it throughout 2008.

Wooing of Barichello through Ferran, and now systematically cornering the Brazilian after similarly shunting off Gil is another story.

Do we have to go through series of events where Aguri Suzuki was running from Pillar to post and getting backers from Magma, Spice Group (India) and Mr. Fry was single handedly blocking all those moves. Most dodgy was Fry Blocking Spice Group and Narain Karthikeyan ” Narain doesn’t fit in Honda culture“.

It was like give us blank cheques and don’t ask for anything in return :)

I am sure Nick Fry must have pocketed enough Moolah in this engagement, if only he gets it onboard the team can run for another couple of years ;)

They can hardly stand toe to toe with the other FOTA members talking about drastic cost-cutting measures and not mention Honda’s withdrawal, it would completely undermine FOTA’s position against Mosley.

Yep I think that’s it.

Too Good –

Nick has been systematically making this team as “Of the, By the, For the” British.

I think you have an oddly paranoid take on what happened. Honda did give Andretti a test but even so with testing miles so tightly restricted why should they be giving tests to drivers with who are not strong road circuit drivers to begin with? For that matter why should Honda have propped up an ailing B-team that was costing them money? And if Fry was running the team ‘for the British’ why was a Japanese motorbike designer put in charge of aerodynamics?

I don’t claim to have a deep understanding of what’s gone on at Honda over the past few years but your point of view is so vehemently put I think you just have a grudge against them for some reason.

Andretti a test but even so with testing miles so tightly restricted why should they be giving tests to drivers with who are not strong road circuit drivers to begin with?

Keith, Thanks for pointing to the testing restrictions, a point that was sadly forgotten by many on this forum when beating down Nelson Piquet that he didn’t get enough car time in 2007 season, since “Race drivers used most of the test time”.

Anyways Just to set records straight, Andretti has had lousy seasons after sensational debut in 2006, when his good performances were on some of the road circuits as well.

FYI IRL is not just Oval racing ;) .

And that still leaves the question open, when your backer is Japanese Auto Giant, and a country that has immense F1 following and good Motorsports tradition, What had Fry and Co to offer to Japanese Fans ? Not a Single Japanese Development driver :?. The conways and rossiters.. the list goes on…

The Super Aguri case is another recent one and Nick’s Role in its demise well documented.

I am definitely not paranoid , but Nick’s role in the entire engagement still remains under cloud. And nobody can deny that.

I have put the same rationale in your article on Cost of One Point, and voiced out, its time for Honda to evaluate their engagment in the Sport.
The way the HondaF1 operations are run, Honda should just limit their involvement as Engine Supplier(Vendor) and then Nick and Brawn drive the team as per “their agenda”

To restate what I have stated, it always looked like “Give me Blank cheque” and let me do things my own way kind of relationship. The circumstantial evidences are too overwhelming to brush it off as Paranoia

This is the worst possible outcome for this sport, to lose such a major influence as Honda. Personally, I always felt that they were better off supplying existing teams with engines, rather than starting their own team, which isn’t as easy as people think.
As has been proven at Honda, and Toyota, that the biggest budgets do not always ensure success. My main concern now is that if the Honda F1 Team are dead and buried, what about the others?
Mercedes, BMW, Renault, even the all conquering Ferrari marks, are they doing well at the moment? More so than Honda, I doubt it?
On a different note, I wonder how this news will affect the IRL, as their cars are powered solely by Honda. If Honda pulled out of that series too, the IRL would be pretty much out of business.

To be fair if Bernie gets his way with this silly medal system whats the attraction for a team like Honda who based on results from this season would be spending most weekends racing around for nothing?

I’m sure the guys at the top who are financing Honda’s f1 team wouldnt be that excited about donating valuable resources (in the current financial climate) to produce a net result, which based on this season, would have produced one silver medal.

I’m worried that more will follow. How much longer can a customer team like williams be competitve when they are clearly suffering financial problems? Will Torro Rosso last much longer before Red Bull decide that its not financially viable to have two teams competing in f1?

This is a worrying time for f1. Maybe bernie should start prioritising and look more at cost cutting measures and leave things like the points system alone for the time being.

If you do the “melt-down” scenario, to continue the metaphor, it is difficult to set F1 aside from the general oncoming financial malaise.

You lose some of the car companies, some of the foreign tracks, throw in a pile of advertising money; and suddenly everything is in the retrenchment mode, all parties needing to offload anything not essential to rolling something, anything, onto the grid.

Gee….did we just live through the Golden Age, commercially speaking of course, of Formula One?

I hope that if Honda dose indeed pull the plug, someone will jump in and operate the team for next season. That being said, I consider it highly unlikley, but will still hope for the best. Firstly, my thoughts are with the staff and employees who will be affected by this decision- best to them if some or all do find themselves out of work because of this.

I believe linking Toyota and Renault to this may be a bit different, as those teams are well-sponsored and Renault in particular have had recent success and have a top driver in their ranks. Still, at times like this it is the bottom line that makes sense, and it would not entirely suprise me to see one of the other manufacturer-based teams pull out.

The Limit- To be honest, I do believe that M-B, BMW, and Ferrari are doing better than the mainstream automakers. While I have no hard numbers to base this on, wealthy people will always want to upgrade and trade in for a new ride, and I would expect that these carmakers are not in as bad of shape as the ones who seel to mainstreamers such as myself.

Chris- Not to nitpick at a time like this, but with Rubens having come in third at Silverstone, woulden’t the medal have been a bronze?

Nick Fry said in an interview on GMTV this morning that the team have had 3 serious offers from potential buyers in the past 12 hours.

I don’t doubt that there might be people interested, but actually taking the plunge is different. There was “interest” in Aguri, “interest” in STR which has not manifested itself very much so far.

Someone might buy them, but to run as a customer-type team. I think it highly unlikely someone is going to buy them to run as a manufacturer. And I think they might go through a Jordan-Midland-Spyker-Force India like period of a different buyer every season for a bit.

I was shocked when I saw this story as it seemed to come out of the blue. Only last week they were testing drivers for next season so this decision must of come about very quickly. It is another example of the global economic conditions that such a big event could happen so suddenly.

Although this must bring into question the future of other teams there are differences between Honda and the other teams.

For the past two years because of the Earth Dream concept the team have not had much sponsorship so while the team still seemed to have a top budget from reports more of it had to come from Honda than normal.

Also the fact that for the last two season the have been down at the bottom of the championship would have made it is easier to pull the plug than if they had a been winning races or had a real chance of a championship in the next few years.

Although Car companies may say F1 is about R&D the money spent can more easily be justified as advertising, and if Honda were spending more than others yet still at the back it shouldn’t have surprised me that they reconsidered their future in F1.

In current economic atmosphere, no auto manufacturer can justify employee layoffs in name of improving operational effectiveness on one hand spending Millions and Billions of Dollars in Sports Sponsorship.

Honda’s involvement in F1 didn’t provide much return from success point anyways …

Its time for Nick to take dig dip into his pockets and come up with the monies, if he is that serious about racing and F1 ;)